Skip to content
CXProWealth

Arm

ARM · Nasdaq

Research outgrew revenue, holding operating profit growth to 8.3%

R&D of $2.776B grew 34.0% against revenue growth of 22.8%, so operating income rose only 8.3% to $900M.

FY2026, the fiscal year to Mar 31, 2026 · 20-F filed May 26, 2026

FY2026 · revenue
$4.9B+22.8% on the year
Operating margin
18.3%
Net income
$904.0M
Free cash flow
$979.0M

Largest source of revenue: Royalty Revenue, 53.1% of the total.

Follow the money

Where Arm's money goes

Tap the picture to explore the flow: levels, scale, every line and its figures.
Key insights · FY2026
  1. 01

    Research outgrew revenue, holding operating profit growth to 8.3%

    R&D of $2.776B grew 34.0% against revenue growth of 22.8%, so operating income rose only 8.3% to $900M.

    Why it matters

    R&D was $2.776B in FY2026, more than triple operating income of $900M, and 57.8% of the $4.799B gross profit, up from 53.3% of gross profit a year earlier. As a share of revenue it rose 4.74 points to 56.4%. Selling, general and administrative costs grew a slower 13.3% to $1.115B, which softened the effect, but operating margin still fell 2.45 points to 18.3%, from 20.7%.1

    The direction is not new, the size is. In FY2025 R&D was $2.071B against operating income of $831M. This year R&D grew 34.0% while operating income grew 8.3%, so the gap between them widened.1

    AnalysisAnalysis: with cost of sales this small, R&D is where Arm's product is made, so it behaves more like a cost of goods than like overhead. Spending that runs ahead of revenue is a bet on designs that will be licensed and later earn royalties. Any return arrives in later years, so one year's operating margin says little on its own about whether the bet is working.

  2. 02

    SoftBank and Arm China supplied most of the growth

    Related-party revenue reached $1.499B from $823M, lifting its share of revenue from 20.5% to 30.5%.

    Why it matters

    Revenue from related parties rose to $1.499B from $823M. Revenue from unrelated customers rose to $3.421B from $3.184B, so its share of total revenue fell to 69.5% from 79.5%. The two related channels the filing names are entities under common control with SoftBank, $704.4M or 14.3% of revenue, and IP licensing tied to Arm China, $790.6M or 16.1% of revenue.1

    The SoftBank revenue comes from a Consulting Agreement under which Arm provides "technical consultancy and advisory services" and licensing. The filing records a current contract asset from a SoftBank affiliate, meaning revenue recognized before it was paid, and says one statement of work was restructured into a fixed payment due in the following fiscal year.1

    AnalysisAnalysis: revenue from the controlling shareholder is revenue, but its price is not set in an open market and its continuation depends on one party's plans. The broader test of the year's growth is whether customers outside SoftBank and Arm China carry more of the increase in later periods.

  3. 03

    A tax charge offset the gains below operating profit

    Pre-tax income rose 60.7% on non-operating gains, but a $253M tax charge left net income of $904M, level with operating income.

    Why it matters

    Income before taxes was $1.157B, well above operating income of $900M. Three lines below operating income lifted it: net interest income of $111M, other non-operating income of $132M against $10M a year earlier, and a $14M gain from equity investments against a $237M loss.1

    Taxes then moved the other way. Net income of $904M equals pre-tax income less a $253M tax charge, 21.9% of pre-tax income. A year earlier the same line was a $72M credit, which lifted net income to $792M from pre-tax income of $720M. So net income grew 14.1% while pre-tax income grew 60.7%, and diluted earnings per share rose to $0.85 from $0.75.1

    AnalysisCaveat: the tax line is labeled benefit (expense) in the source data. The arithmetic of the income statement shows a charge this year and a credit last year, and that is how it is read here.

    AnalysisAnalysis: the filing excerpt records that Arm received proceeds for its minority stake in Ampere when SoftBank's acquisition of Ampere closed, but it does not tie those proceeds to a specific line. Treating the non-operating gains as recurring would be an assumption. Operating income, up 8.3%, is the cleaner measure of the year.

  4. 04

    Cash flow recovered while capital spending kept multiplying

    Operating cash flow was $1.524B against $397M, but capital spending rose to $545M from $219M and took 35.8% of it.

    Why it matters

    Operating cash flow of $1.524B compared with $397M the prior year, and was 1.69 times net income of $904M. Free cash flow reached $979M against $178M, a 19.9% margin on revenue.1

    Capital spending was $545M, 11.1% of revenue, against $219M in FY2025 and $34M in FY2022, 16 times that level. It took 35.8% of operating cash flow, down from more than half in FY2025, because operating cash recovered faster than spending grew.1

    AnalysisAnalysis: for a company that sells designs rather than chips, capital spending of this size is unusual, and the excerpt supplied here does not say what it buys. Free cash flow holds only while operating cash grows faster than that spending; FY2025, with free cash flow of $178M on operating cash flow of $397M, shows the other case. Part of this year's SoftBank revenue also sits in a contract asset, booked but not yet paid in cash.

Sources

  1. 1.Arm 20-F for the period to 2026-03-31 (the filing), May 26, 2026, read Nov 2, 2026

Have a question about Arm? Ask CXProWealth on ChatGPT.Free membership required.

Business performance

Growth, profit and margin

Revenue went from $2.7B in FY2022 to $4.9B in FY2026, the operating margin from 23.4% to 18.3%, over 4 years.

  • Revenue$4.9B
  • Operating income$900.0M
  • Operating margin18.3%
Period
FY2026
Revenue
$4.9B
Operating income
$900.0M
Operating margin
18.3%
Net income
$904.0M
Free cash flow
$979.0M
Business performance

Does the profit turn into cash?

FY2026: free cash flow of $979.0M against net income of $904.0M.

  • Operating cash flow$1.5B
  • Capital expenditure$545.0M
  • Free cash flow$979.0M
  • Net income$904.0M

Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.

Financial data and sources

How the revenue mix has shifted

Each breakdown the filing reports, as shares of revenue, for every period it restates.

Revenue - Schedule of Disaggregation of Revenue (Details). The filing restates this breakdown for 3 periods.

Click a member to isolate it across the years shown.

The figures

Margins, cash and growth for the period, each with what it was computed from.

Gross margin
97.5%
Source20-F, Derived from Gross profit (loss) and Revenue in the 20-F filed 2026-05-26
Operating margin
18.3%
Source20-F, Derived from Operating income (loss) and Revenue in the 20-F filed 2026-05-26
Net margin
18.4%
Source20-F, Derived from Net income (loss) and Revenue in the 20-F filed 2026-05-26
Free cash flow
$979.0M
Source20-F, Derived from Net cash provided by (used for) operating activities and Purchases of property and equipment in the 20-F filed 2026-05-26
Free cash flow margin
19.9%
Source20-F, Derived from Net cash provided by (used for) operating activities and Purchases of property and equipment and Revenue in the 20-F filed 2026-05-26
Cash conversion
1.69x
Source20-F, Derived from Net cash provided by (used for) operating activities and Net income (loss) in the 20-F filed 2026-05-26
Capital spending
11.1%
Source20-F, Derived from Purchases of property and equipment and Revenue in the 20-F filed 2026-05-26
Revenue growth
+22.8%
From the record's own history, against the prior year.

Where revenue comes from

Every breakdown the filing reports for the period, with each item's share.

Revenue streams

Royalty Revenue$2.6B53.1%
License and Other Revenue$2.3B46.9%

Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 20-F filed 2026-05-26

RelatedPartyTransactionsByRelatedParty

Nonrelated Party$3.4B69.5%
Related Party$1.5B30.5%

Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 20-F filed 2026-05-26

TimingOfTransferOfGoodOrService

Point-in-time revenues$1.2B24.9%
Over-time revenues$1.1B22.0%

These items do not sum to total revenue; the filing states them beside it. Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 20-F filed 2026-05-26

RelatedPartyTransaction

IP Licensing Revenue$790.6M16.1%
Common Control in SoftBank$704.4M14.3%
Other Entities Controlled By SoftBank Group$00.0%

These items do not sum to total revenue; the filing states them beside it. Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 20-F filed 2026-05-26

What it costs

The cost lines beneath operating income, each as a share of revenue, then the operating result.

Costs are reported by function: what it cost to make what was sold, then the expenses of selling, developing and administering.

Cost lineFY2026Of revenueSource
Cost of sales$121.0M2.5%Source20-F, us-gaap:CostOfRevenue, as reported in the 20-F filed 2026-05-26
Operating income (loss)$900.0M18.3%Source20-F, us-gaap:OperatingIncomeLoss, as reported in the 20-F filed 2026-05-26

The statements, as filed

The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.

Income statement20 lines, as presented in the 20-F
LineFY2026A year earlierChangeOf revenueSource
Income Statement
Revenue$4.92B$4.01B+23%100%Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, as reported in the 20-F filed 2026-05-26
Nonrelated Party$3.42B$3.18B+7.4%69.5%Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax [us-gaap:NonrelatedPartyMember], as reported in the 20-F filed 2026-05-26
Related Party$1.50B$823.0M+82%30.5%Source20-F, us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax [us-gaap:RelatedPartyMember], as reported in the 20-F filed 2026-05-26
Cost of sales (shown as a deduction)($121.0M)$121.0M0.0%2.5%Source20-F, us-gaap:CostOfRevenue, as reported in the 20-F filed 2026-05-26
Gross profit (loss)$4.80B$3.89B+23%97.5%Source20-F, us-gaap:GrossProfit, as reported in the 20-F filed 2026-05-26
Research and development (shown as a deduction)($2.78B)$2.07B+34%56.4%Source20-F, us-gaap:ResearchAndDevelopmentExpense, as reported in the 20-F filed 2026-05-26
Selling, general and administrative (shown as a deduction)($1.12B)$984.0M+13%22.7%Source20-F, us-gaap:SellingGeneralAndAdministrativeExpense, as reported in the 20-F filed 2026-05-26
Disposal, restructuring and other operating expenses, net (shown as a deduction)($8.0M)$00.2%Source20-F, arm:DisposalRestructuringAndOtherOperatingExpensesNet, as reported in the 20-F filed 2026-05-26
Total operating expenses (shown as a deduction)($3.90B)$3.06B+28%79.2%Source20-F, us-gaap:OperatingExpenses, as reported in the 20-F filed 2026-05-26
Operating income (loss)$900.0M$831.0M+8.3%18.3%Source20-F, us-gaap:OperatingIncomeLoss, as reported in the 20-F filed 2026-05-26
Income (loss) from equity investments, net$14.0M-$237.0M0.3%Source20-F, us-gaap:GainLossOnInvestments, as reported in the 20-F filed 2026-05-26
Interest income, net$111.0M$116.0M-4.3%2.3%Source20-F, us-gaap:InterestIncomeExpenseNonoperatingNet, as reported in the 20-F filed 2026-05-26
Other non-operating income (loss), net$132.0M$10.0M+1,220%2.7%Source20-F, us-gaap:OtherNonoperatingIncomeExpense, as reported in the 20-F filed 2026-05-26
Income (loss) before income taxes$1.16B$720.0M+61%23.5%Source20-F, us-gaap:IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest, as reported in the 20-F filed 2026-05-26
Income tax benefit (expense) (shown as a deduction)($253.0M)-$72.0M5.1%Source20-F, us-gaap:IncomeTaxExpenseBenefit, as reported in the 20-F filed 2026-05-26
Net income (loss)$904.0M$792.0M+14%18.4%Source20-F, us-gaap:NetIncomeLoss, as reported in the 20-F filed 2026-05-26
Net income (loss) per share attributable to ordinary shareholders
Basic (in USD per share)$1$1+13%0.0%Source20-F, us-gaap:IncomeLossFromContinuingOperationsPerBasicShare, as reported in the 20-F filed 2026-05-26
Diluted (in USD per share)$1$1+13%0.0%Source20-F, us-gaap:IncomeLossFromContinuingOperationsPerDilutedShare, as reported in the 20-F filed 2026-05-26
Weighted average ordinary shares outstanding
Basic (in shares)1,061,000,0001,050,000,000+1.0%Source20-F, us-gaap:WeightedAverageNumberOfSharesOutstandingBasic, as reported in the 20-F filed 2026-05-26
Diluted (in shares)1,068,000,0001,063,000,000+0.5%Source20-F, us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding, as reported in the 20-F filed 2026-05-26
Cash flow statement46 lines, as presented in the 20-F
LineFY2026A year earlierChangeSource
Cash flows provided by (used for) operating activities:
Net income (loss)$904.0M$792.0M+14%Source20-F, us-gaap:NetIncomeLoss, as reported in the 20-F filed 2026-05-26
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization$249.0M$183.0M+36%Source20-F, us-gaap:DepreciationDepletionAndAmortization, as reported in the 20-F filed 2026-05-26
Deferred income taxes$15.0M-$218.0MSource20-F, us-gaap:DeferredIncomeTaxesAndTaxCredits, as reported in the 20-F filed 2026-05-26
(Income) loss from equity investments, net (shown as a deduction)($14.0M)-$237.0MSource20-F, us-gaap:GainLossOnInvestments, as reported in the 20-F filed 2026-05-26
Share-based compensation cost$1.05B$820.0M+28%Source20-F, us-gaap:ShareBasedCompensation, as reported in the 20-F filed 2026-05-26
Operating lease expense$59.0M$40.0M+48%Source20-F, us-gaap:OperatingLeaseRightOfUseAssetAmortizationExpense, as reported in the 20-F filed 2026-05-26
Gain on business divestiture (shown as a deduction)($131.0M)$0Source20-F, us-gaap:GainLossOnSaleOfBusiness, as reported in the 20-F filed 2026-05-26
Other non-cash operating activities, net (shown as a deduction)($8.0M)-$8.0MSource20-F, us-gaap:OtherNoncashIncomeExpense, as reported in the 20-F filed 2026-05-26
Changes in assets and liabilities:
Accounts receivable, net (including receivables from related parties) (shown as a deduction)($201.0M)$331.0M-39%Source20-F, us-gaap:IncreaseDecreaseInAccountsReceivable, as reported in the 20-F filed 2026-05-26
Contract assets, net (including contract assets from related parties) (shown as a deduction)($309.0M)$412.0M-25%Source20-F, us-gaap:IncreaseDecreaseInContractWithCustomerAsset, as reported in the 20-F filed 2026-05-26
Prepaid expenses and other assets (shown as a deduction)($117.0M)$140.0M-16%Source20-F, us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets, as reported in the 20-F filed 2026-05-26
Accrued compensation and benefits$24.0M-$152.0MSource20-F, us-gaap:IncreaseDecreaseInEmployeeRelatedLiabilities, as reported in the 20-F filed 2026-05-26
Contract liabilities (including contract liabilities from related parties)$135.0M-$4.0MSource20-F, us-gaap:IncreaseDecreaseInContractWithCustomerLiability, as reported in the 20-F filed 2026-05-26
Tax liabilities-$11.0M-$6.0M+83%Source20-F, us-gaap:IncreaseDecreaseInAccruedIncomeTaxesPayable, as reported in the 20-F filed 2026-05-26
Operating lease liabilities-$44.0M-$39.0M+13%Source20-F, us-gaap:IncreaseDecreaseInOperatingLeaseLiability, as reported in the 20-F filed 2026-05-26
Other liabilities (including payables to related parties)-$79.0M-$381.0M-79%Source20-F, us-gaap:IncreaseDecreaseInOtherOperatingLiabilities, as reported in the 20-F filed 2026-05-26
Cash flows provided by (used for) operating activities:
Net cash provided by (used for) operating activities$1.52B$397.0M+284%Source20-F, us-gaap:NetCashProvidedByUsedInOperatingActivities, as reported in the 20-F filed 2026-05-26
Cash flows provided by (used for) investing activities
Purchases of short-term investments (shown as a deduction)($1.14B)$680.0M+68%Source20-F, us-gaap:PaymentsToAcquireShortTermInvestments, as reported in the 20-F filed 2026-05-26
Proceeds from maturity of short-term investments$1.03B$940.0M+9.6%Source20-F, us-gaap:ProceedsFromSaleMaturityAndCollectionOfShorttermInvestments, as reported in the 20-F filed 2026-05-26
Purchases of equity investments (shown as a deduction)($11.0M)$57.0M-81%Source20-F, us-gaap:PaymentsToAcquireLongtermInvestments, as reported in the 20-F filed 2026-05-26
Purchases of intangible assets (shown as a deduction)($30.0M)$20.0M+50%Source20-F, us-gaap:PaymentsToAcquireIntangibleAssets, as reported in the 20-F filed 2026-05-26
Proceeds from business divestiture$127.0M$0Source20-F, us-gaap:ProceedsFromDivestitureOfBusinesses, as reported in the 20-F filed 2026-05-26
Proceeds from settlement of loans, including convertible loans$56.0M$0Source20-F, us-gaap:ProceedsFromCollectionOfLoansReceivable, as reported in the 20-F filed 2026-05-26
Proceeds from sale or liquidation of equity investments$205.0M$0Source20-F, arm:ProceedsFromSaleAndLiquidationsOfEquityMethodInvestments, as reported in the 20-F filed 2026-05-26
Purchases of property and equipment (shown as a deduction)($545.0M)$219.0M+149%Source20-F, us-gaap:PaymentsToAcquirePropertyPlantAndEquipment, as reported in the 20-F filed 2026-05-26
Other investing activities, net, including investments in convertible loans (shown as a deduction)($17.0M)-$1.0MSource20-F, us-gaap:PaymentsForProceedsFromOtherInvestingActivities, as reported in the 20-F filed 2026-05-26
Net cash provided by (used for) investing activities-$325.0M-$35.0M+829%Source20-F, us-gaap:NetCashProvidedByUsedInInvestingActivities, as reported in the 20-F filed 2026-05-26
Cash flows provided by (used for) financing activities
Payments of intangible asset obligations (shown as a deduction)($67.0M)$59.0M+14%Source20-F, arm:RepaymentsOfIntangibleAssetObligation, as reported in the 20-F filed 2026-05-26
Proceeds from Employee Stock Purchase Plan$74.0M$0Source20-F, us-gaap:ProceedsFromStockPlans, as reported in the 20-F filed 2026-05-26
Other financing activities, net-$26.0M-$23.0M+13%Source20-F, us-gaap:ProceedsFromPaymentsForOtherFinancingActivities, as reported in the 20-F filed 2026-05-26
Payments of withholding tax on vested shares (shown as a deduction)($529.0M)$120.0M+341%Source20-F, us-gaap:PaymentsRelatedToTaxWithholdingForShareBasedCompensation, as reported in the 20-F filed 2026-05-26
Net cash provided by (used for) financing activities-$548.0M-$202.0M+171%Source20-F, us-gaap:NetCashProvidedByUsedInFinancingActivities, as reported in the 20-F filed 2026-05-26
Statement of Cash Flows
Effect of foreign exchange rate changes on cash and cash equivalents$15.0M$2.0M+650%Source20-F, us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 20-F filed 2026-05-26
Net increase (decrease) in cash and cash equivalents$666.0M$162.0M+311%Source20-F, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect, as reported in the 20-F filed 2026-05-26
Cash and cash equivalents at the beginning of the period$2.09BSource20-F, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 20-F filed 2026-05-26
Cash and cash equivalents at the end of the period$2.75B$2.09B+32%Source20-F, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 20-F filed 2026-05-26
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net of refunds (shown as a deduction)($223.0M)$149.0M+50%Source20-F, us-gaap:IncomeTaxesPaid, as reported in the 20-F filed 2026-05-26
Non-cash investing and financing activities:
Non-cash additions in property and equipment$29.0M$27.0M+7.4%Source20-F, arm:NonCashChangesInPropertyPlantAndEquipment, as reported in the 20-F filed 2026-05-26
Non-cash additions in finance lease right-of-use assets$56.0M$33.0M+70%Source20-F, us-gaap:RightOfUseAssetObtainedInExchangeForFinanceLeaseLiability, as reported in the 20-F filed 2026-05-26
Non-cash additions in intangible assets$131.0M$51.0M+157%Source20-F, arm:NonCashChangesInIntangibleAssets, as reported in the 20-F filed 2026-05-26
Non-cash additions in operating lease right-of-use assets$98.0M$146.0M-33%Source20-F, arm:NonCashAdditionsInOperatingLeaseRightOfUseAssets, as reported in the 20-F filed 2026-05-26
Non-cash additions in operating lease liabilities$107.0M$149.0M-28%Source20-F, arm:NonCashAdditionalOfOperatingLeaseLiabilities, as reported in the 20-F filed 2026-05-26
Non-cash additions to equity investments from conversion of certain receivables$8.0M$5.0M+60%Source20-F, arm:NonCashAdditionsToEquityInvestmentsFromConversionOfCertainReceivables, as reported in the 20-F filed 2026-05-26
Non-cash distributions to shareholders$0$0Source20-F, arm:NonCashDistributionsToShareholders, as reported in the 20-F filed 2026-05-26
Non-cash withholding tax on vested shares$64.0M$8.0M+700%Source20-F, arm:NonCashWithholdingTaxOnVestedShares, as reported in the 20-F filed 2026-05-26
Non-cash reclassification of share-based compensation costs$0$0Source20-F, arm:NonCashReclassificationOfShareBasedCompensationCosts, as reported in the 20-F filed 2026-05-26
Balance sheet36 lines, as presented in the 20-F
LineFY2026A year earlierChangeSource
Current assets:
Cash and cash equivalents$2.75B$2.09B+32%Source20-F, us-gaap:CashAndCashEquivalentsAtCarryingValue, as reported in the 20-F filed 2026-05-26
Short-term investments$850.0M$740.0M+15%Source20-F, us-gaap:ShortTermInvestments, as reported in the 20-F filed 2026-05-26
Accounts receivable, net (including receivables from related parties of $270 and $279 as of March 31, 2026 and 2025, respectively)$1.30B$1.11B+17%Source20-F, us-gaap:AccountsReceivableNetCurrent, as reported in the 20-F filed 2026-05-26
Contract assets (including contract assets from related parties of $646 and $152 as of March 31, 2026 and 2025, respectively)$977.0M$642.0M+52%Source20-F, us-gaap:ContractWithCustomerAssetNetCurrent, as reported in the 20-F filed 2026-05-26
Prepaid expenses and other current assets$358.0M$256.0M+40%Source20-F, us-gaap:PrepaidExpenseAndOtherAssetsCurrent, as reported in the 20-F filed 2026-05-26
Total current assets$6.24B$4.83B+29%Source20-F, us-gaap:AssetsCurrent, as reported in the 20-F filed 2026-05-26
Non-current assets:
Property and equipment, net$772.0M$354.0M+118%Source20-F, us-gaap:PropertyPlantAndEquipmentNet, as reported in the 20-F filed 2026-05-26
Operating lease right-of-use assets$379.0M$320.0M+18%Source20-F, us-gaap:OperatingLeaseRightOfUseAsset, as reported in the 20-F filed 2026-05-26
Finance lease right-of-use assets$69.0M$40.0M+73%Source20-F, us-gaap:FinanceLeaseRightOfUseAsset, as reported in the 20-F filed 2026-05-26
Equity investments (including investments held under fair value option of $148 and $300 as of March 31, 2026 and 2025, respectively)$387.0M$565.0M-32%Source20-F, us-gaap:LongTermInvestments, as reported in the 20-F filed 2026-05-26
Goodwill$1.62B$1.62B+0.2%Source20-F, us-gaap:Goodwill, as reported in the 20-F filed 2026-05-26
Intangible assets, net$230.0M$151.0M+52%Source20-F, us-gaap:IntangibleAssetsNetExcludingGoodwill, as reported in the 20-F filed 2026-05-26
Deferred tax assets$375.0M$401.0M-6.5%Source20-F, us-gaap:DeferredIncomeTaxAssetsNet, as reported in the 20-F filed 2026-05-26
Non-current portion of contract assets$320.0M$346.0M-7.5%Source20-F, us-gaap:ContractWithCustomerAssetNetNoncurrent, as reported in the 20-F filed 2026-05-26
Other non-current assets$312.0M$305.0M+2.3%Source20-F, us-gaap:OtherAssetsNoncurrent, as reported in the 20-F filed 2026-05-26
Total non-current assets$4.47B$4.10B+8.9%Source20-F, us-gaap:AssetsNoncurrent, as reported in the 20-F filed 2026-05-26
Assets:
Total assets$10.70B$8.93B+20%Source20-F, us-gaap:Assets, as reported in the 20-F filed 2026-05-26
Current liabilities:
Accrued compensation and benefits$154.0M$140.0M+10%Source20-F, us-gaap:EmployeeRelatedLiabilitiesCurrent, as reported in the 20-F filed 2026-05-26
Tax liabilities$106.0M$124.0M-15%Source20-F, us-gaap:TaxesPayableCurrent, as reported in the 20-F filed 2026-05-26
Contract liabilities (including contract liabilities from related parties of $36 and $81 as of March 31, 2026 and 2025, respectively)$294.0M$209.0M+41%Source20-F, us-gaap:ContractWithCustomerLiabilityCurrent, as reported in the 20-F filed 2026-05-26
Operating lease liabilities$39.0M$30.0M+30%Source20-F, us-gaap:OperatingLeaseLiabilityCurrent, as reported in the 20-F filed 2026-05-26
Other current liabilities (including payables to related parties of $20 and $11 as of March 31, 2026 and 2025, respectively)$447.0M$426.0M+4.9%Source20-F, us-gaap:OtherLiabilitiesCurrent, as reported in the 20-F filed 2026-05-26
Total current liabilities$1.04B$929.0M+12%Source20-F, us-gaap:LiabilitiesCurrent, as reported in the 20-F filed 2026-05-26
Non-current liabilities:
Non-current portion of accrued compensation$32.0M$26.0M+23%Source20-F, arm:EmployeeRelatedLiabilitiesNoncurrent, as reported in the 20-F filed 2026-05-26
Deferred tax liabilities$39.0M$41.0M-4.9%Source20-F, us-gaap:DeferredIncomeTaxLiabilitiesNet, as reported in the 20-F filed 2026-05-26
Non-current portion of contract liabilities (including non-current portion of contract liabilities from related parties of $23 and $24 as of March 31, 2026 and 2025, respectively)$752.0M$702.0M+7.1%Source20-F, us-gaap:ContractWithCustomerLiabilityNoncurrent, as reported in the 20-F filed 2026-05-26
Non-current portion of operating lease liabilities$393.0M$316.0M+24%Source20-F, us-gaap:OperatingLeaseLiabilityNoncurrent, as reported in the 20-F filed 2026-05-26
Other non-current liabilities$161.0M$79.0M+104%Source20-F, us-gaap:OtherLiabilitiesNoncurrent, as reported in the 20-F filed 2026-05-26
Total non-current liabilities$1.38B$1.16B+18%Source20-F, us-gaap:LiabilitiesNoncurrent, as reported in the 20-F filed 2026-05-26
Statement of Financial Position
Total liabilities$2.42B$2.09B+15%Source20-F, us-gaap:Liabilities, as reported in the 20-F filed 2026-05-26
Shareholders’ equity:
Ordinary shares, $0.001 par value; 1,097 shares authorized and 1,064 shares issued and outstanding as of March 31, 2026; and 1,088 shares authorized and 1,057 issued and outstanding as of March 31, 2025$2.0M$2.0M0.0%Source20-F, us-gaap:CommonStockValue, as reported in the 20-F filed 2026-05-26
Additional paid-in capital$3.47B$2.92B+19%Source20-F, us-gaap:AdditionalPaidInCapital, as reported in the 20-F filed 2026-05-26
Accumulated other comprehensive income (loss)$370.0M$372.0M-0.5%Source20-F, us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax, as reported in the 20-F filed 2026-05-26
Retained earnings$4.45B$3.54B+26%Source20-F, us-gaap:RetainedEarningsAccumulatedDeficit, as reported in the 20-F filed 2026-05-26
Total shareholders’ equity$8.29B$6.84B+21%Source20-F, us-gaap:StockholdersEquity, as reported in the 20-F filed 2026-05-26
Statement of Financial Position
Total liabilities and shareholders’ equity$10.70B$8.93B+20%Source20-F, us-gaap:LiabilitiesAndStockholdersEquity, as reported in the 20-F filed 2026-05-26

About this data

Source
Arm 20-F, accession 0001973239-26-000097, filed May 26, 2026, read on Nov 2, 2026.
History
From the SEC's XBRL company facts, the value from the latest filing that stated each period.
Reading
Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
Version
methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
Edge and risks

What holds Arm's model up, and what could bend it

Competitive edge

  • Delivering one more design costs Arm almost nothing

    Cost of sales stayed at $121M while revenue rose to $4.92B from $4.007B, leaving a 97.5% gross margin.

    The detail

    Cost of sales was $121M in both FY2026 and FY2025, 2.5% of revenue this year. Gross margin rose to 97.5% from 97.0% as revenue grew 22.8%.1

    AnalysisAnalysis: a licensed design is not a manufactured unit, so serving another customer adds little cost and the economics sit in the R&D line instead. The advantage holds as long as chipmakers keep choosing Arm's architecture for new designs.

  • Each design earns a fee, then royalties per chip

    Royalties of $2.613B, 53.1% of revenue, come from chips built on designs licensed earlier, beside $2.307B of license and other revenue.

    The detail

    License and other revenue grew 25.5% to $2.307B and royalty revenue 20.5% to $2.613B, so licenses gained 1.0 point of the mix to 46.9%. Of license and other revenue, $1.227B was recognized at a point in time and $1.08B over time.1

    AnalysisAnalysis: royalties accrue on shipments long after the engineering is paid for, so past research keeps earning. When license revenue grows faster than royalties, as this year, it can mark new designs not yet in production; whether royalties follow depends on those chips shipping in volume.

What to watch

  • The controlling shareholder is also a major customer

    SoftBank controls the board and, through a Consulting Agreement, supplied $704.4M of revenue, 14.3% of the total.

    The detail

    SoftBank Group beneficially owns a majority of Arm's shares and, under the Shareholder Governance Agreement, can designate most board candidates, must consent to larger new share incentive plans and is consulted before Arm publishes earnings. The filing names the risk that SoftBank Group's interests "may conflict with our own interests and those of holders of our ADSs".1

    Revenue under the Consulting Agreement is partly recognized ahead of payment: the filing records a current contract asset from a SoftBank affiliate and a restructured statement of work paid as a fixed amount in the following fiscal year. Larger transactions with SoftBank go to the board for review and approval.1

  • Most of Arm's shares secure SoftBank's margin loan

    SoftBank pledged most of its Arm shares against a margin loan; a default could let lenders foreclose and change who controls Arm.

    The detail

    Subsidiaries of SoftBank Group borrowed under a margin loan facility secured by a pledge of a majority of Arm's ordinary shares. On non-payment at maturity or another default, the lenders may foreclose on those shares and take ownership of them. The filing states this "could cause a change of control of us", and Arm has agreed to facilitate a foreclosure.1

    AnalysisAnalysis: the risk sits with the shareholder rather than the business, but a change of control would reach the governance rights and the SoftBank revenue described above.

  • Arm China pays on figures it reports itself

    IP licensing tied to Arm China was $790.6M, 16.1% of revenue, from an entity Arm does not control and that reports its own sales.

    The detail

    Arm China licenses Arm's IP and sublicenses it to customers in the PRC. Arm holds a small indirect non-voting interest, and the filing says neither Arm nor SoftBank Group controls Arm China's operations. Payments due to Arm are determined from financial information Arm China provides, and Arm must indemnify Arm China and its PRC sublicensees against third-party IP infringement claims.1

    AnalysisAnalysis: Arm China is Arm's route into the PRC market, worth 16.1% of revenue this year. The filing says that share has edged down over the last three fiscal years, so the channel matters both for its size and for how little of it Arm can see directly.

Sources

  1. 1.Arm 20-F for the period to 2026-03-31 (the filing), May 26, 2026, read Nov 2, 2026
Go deeper

Arm, further in

Member research, then your own questions on ChatGPT.

What could change the outlook

What Arm's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.

  • When does the research bill turn into royalties?

    What has to go right for this year's jump in R&D to show up as royalty growth, and which lines in later filings would show it happening or not.

  • How much of Arm's growth rests on SoftBank?

    The related-party revenue, the contract asset behind it, and what the year looks like with the SoftBank and Arm China channels set apart.

Loading…

CXProWealth on ChatGPT

Have a question about Arm?

Explore its profit drivers, competitive edge, risks, or your own investment and business questions with CXProWealth on ChatGPT.

Ask CXProWealth on ChatGPTFree CXProWealth membership required. Learn more
Questions to start with
  • Why did Arm's R&D grow 34.0% in FY2026 when revenue grew 22.8%, and what is that spending meant to produce?
  • How much of Arm's FY2026 revenue growth came from SoftBank and Arm China rather than other customers?
  • Why did Arm's net income grow 14.1% when its income before taxes rose 60.7%?

Business Lens describes Arm from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.